Mortgage Offer - You Must Repay The Following Commitments in full with 30 days...

MikeyBeLike

Got quite a weird term in my mortgage offer:

"You Must Repay The Following Commitments in full with 30 days of completion of this mortgage: Credit Card/Store card: £1, Student loans: £4621, Ground rent: £1"

Really so confusing, cause 1, i've never had a store card in my life. I was part of the unlucky batch of students so got the 9k fees.. lol my student loan is in the £60k range lol, but even though i've never been aware that student loan was considered a debt?? It was always sold to us as a like "graduate contribution" and not something that goes on your credit files or anything.

Has anybody had this or does this look like an error? I'm a first time buyer so a bit lost. I asked my mortgage advisor initially about it and she told me to just ignore it "Hi. No you don’t need to worry about this or pay it off, they don't check anyway".

But today I received my deed from my solicitors and along with that they sent me the same mortgage offer I received in the post - which outlines the above as well. So now i'm just abit more nervous

ACG

Your mortgage broker sounds like a lazy sod!

Student loan needs declaring, it would be on your payslips anyway. So either it is being cleared and the monthly deductions from your wages will stop or it isnt.

As for the store card - seems odd. You will need to evidence this has been cleared and if you do not have one, then you cant.

As for the ground rent, you can not clear ground rent it will either be due every year or it wont.

I would ask for a copy of your application form.
I would also ask your broker to liaise with the solicitor and sort this out as it seems like they have made some mistakes on your application.

G_M

Have you got a credit card? It says "Credit Card/Store card: £1" so may just relate to cc.


Have you checked your credit record? Maybel one or the other is redorded and you've forgotton. Check!


If your student loan id £60K, be grateful they only want you to repay £4621!

robatwork

I don't read this as having to "clear" ground rent or student loan as ACG alluded to.

More that you commit to paying those amounts (and not less) within 30 days of completion.

MikeyBeLike

My student loan and all my monthly's have been declared. What i'm just shocked about is the sudden requirement to pay a lump sum of £4k in student loan, when i've been paying it through PAYE for the last 4 years~

[Deleted User]

I make the following assumptions about what's happened:

1. The application has maybe failed affordability when the student loan monthly deduction has been keyed to the case. To get round this the broker has said you will clear it just after completion. This allows the lender to ignore it from affordability assessment. The boxes for the student loan on the application have bits for monthly payment, balance, and end date. The balance isn't usually important as a 4k loan is paid at same payment as a 60k loan. The broker has probably just put a random number in the box as 'it doesn't really matter for the calculations'. No one ever checks as it doesn't appear on a credit report. An easy thing to fudge really.

2. You maybe have a credit card that you clear each month? In which case its not unheard of to just stick a £1 there as it acknowledges that you do have a card but it's not a real ongoing debt as its cleared monthly

3. Ground rent - absolutely no idea. If you are buying a leasehold then this needs amending as the lender possibly thinks the ground rent is only £1 a month

So it's either :

1.You didn't pass affordability and thr broker has fudged it to get it to fit and left you open to signing a mortgage contract you have no intention of honouring

2.Or the broker has just skimmed the page and ticked yes to a few boxes, fudged some numbers tjsy don't really matter in to others.

My gut feels it's maybe number 1 as otherwise thr broker would offer to fix it rather than just asking you to ignore it.

Definitely push for a copy of your application and further explanation. And 100% push for a valid mortgage lffer

MikeyBeLike

Thank you Deleted_User, for more information I'm buying with help to buy, i've passed all of their affordability checks and have been approved by them (received a ATP). Wasn't aware there were more affordability checks on the mortgage side of things

gozaimasu

This is common with credit card debts and I assume commercial loans. Never heard it happening with a student loan before. Don't worry about having to pay it off. You'll obviously continue to pay the student loan through PAYE and presumably still be able to pay the mortgage every month.
The broker should have explained it to you though. Would you have been ok with being able to borrow less?

[Deleted User]

It's unlikely that you passed h2b affordability but would fail a lenders checks. Maybe it's just an admin thing.

Just push for a corrected version to come out. Don't accept the lazy response you got

Yalpsmol

Our lender didnt even want to know about my student loan debt- I said I had it, they said they dont need the know the amount just how much i pay a month. Im not repaying mine due to low income so they didnt need any information at all in the end. I can't see why paying off 4k would make any difference to anything as your payments are a 9% of salary above threshold, so dont change depending on total debt. You need to ask your broker.

AdrianC

MikeyBeLike wrote: »

What i'm just shocked about is the sudden requirement to pay a lump sum of £4k in student loan, when i've been paying it through PAYE for the last 4 years~

Don't confuse the amount the SLC want you to repay to conform with your contract, with the amount the mortgage lender want you to repay before they're willing to lend you money.

Two completely different requirements from two completely different people.

Fail to follow the SLC's minimum repayment requirement, they'll take steps to enforce the loan.
Fail to follow the mortgage lender's requirement, they won't lend you the money to buy the house.